Is Church & Dwight Co., Inc. (NYSE:CHD) Overpaying Its CEO?

Matt Farrell became the CEO of Church & Dwight Co., Inc. (NYSE:CHD) in 2016. This analysis aims first to contrast CEO compensation with other large companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Church & Dwight

How Does Matt Farrell’s Compensation Compare With Similar Sized Companies?

According to our data, Church & Dwight Co., Inc. has a market capitalization of US$16b, and pays its CEO total annual compensation worth US$6.3m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

Most shareholders would consider it a positive that Matt Farrell takes less compensation than the CEOs of most other large companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Church & Dwight, below.

NYSE:CHD CEO Compensation December 11th 18
NYSE:CHD CEO Compensation December 11th 18

Is Church & Dwight Co., Inc. Growing?

Over the last three years Church & Dwight Co., Inc. has grown its earnings per share (EPS) by an average of 30% per year. It achieved revenue growth of 13% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has Church & Dwight Co., Inc. Been A Good Investment?

I think that the total shareholder return of 65%, over three years, would leave most Church & Dwight Co., Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.

In Summary…

It appears that Church & Dwight Co., Inc. remunerates its CEO below most large companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Matt Farrell deserves a raise!

Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. So you may want to check if insiders are buying Church & Dwight shares with their own money (free access).

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.